Grocery inflation falls to slowest monthly rate this year but shoppers still feeling the pressure
Like-for-like grocery price inflation has dropped to its lowest level since 2022 and now sits at 16.5% for the four weeks to 11th June 2023, according to the latest data from Kantar.
The latest data shows that almost 70% of households are either ‘extremely’ or ‘very worried’ about rising food and drink prices. There are also signs that people are changing how they cook at home, with 4% fewer meals made using an oven according to Kantar’s most recent 12-week data. Meanwhile, microwave meals increased by 8%.
The last few weeks amidst the summer sunshine volume sales of ice cream were up by 25% and mineral water up 8%. However, consumers are paying more for these items, which rose in price by 20% and 17% respectively.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “This is the lowest rate of grocery price inflation we’ve seen in 2023, which will be a relief to shoppers and retailers. But prices rising at 16.5% isn’t something to celebrate and it’s still the sixth highest monthly figure in the past 15 years.
“Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone.
Fraser added that the ongoing squeeze is “clearly weighing on the nation’s mind”.
“Of the top five financial worries that consumers have, rising grocery prices is the only one that they are more concerned about now than at the start of this year.”
Consumers are doing what they can to offset the impact of inflation, added Fraser McKevitt.
“Savvy shoppers have been continuing to swerve the full force of price increases, with many switching to the cheapest own label lines. Total spending on these value ranges has rocketed by 41% compared to last year and retailers have been quick to respond, expanding their offerings to meet demand. This has helped the value tier to become the fastest growing part of the market every month since June 2022.”
Shopping habits are also being impacted by how people choose to eat and cook at home.
“People are thinking more and more about what they eat and how they cook as the cost-of-living crisis takes its toll on traditional behaviours. The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients.
“Our data shows that the public are turning away from their oven and increasingly using microwaves, which reflects the shift to simpler cooking. We also saw a reduction in hob use and a rise in food prepared with toasters and grills.” **
Traditionally retailers have priced products at ‘round-pound’ points, but there is evidence that the cost-of-living crisis is changing that.
“The proportion of products sold for £1, the single most popular price for a grocery item, has almost halved in a year from 9% to 5%,” said Fraser McKevitt.
“That’s a big shift. Traditionally, ‘round-pound’ prices have been attractive to shoppers, who find them easier to relate to and practical as well with no leftover change. But, with retailers eager to offer value and cash buying less popular, £1.25 has emerged as an increasingly important price point. It now vies with £2 as the second most popular price for a grocery item.”
** Kantar Worldpanel Usage Foods, 12 weeks to 14 May 2023, 11,000 individuals
